India to cut subsidies on phosphate and potash-based fertilisers

7:35 AM, 3rd May 2013

NEW DELHI/MUMBAI, INDIA: India has decided to cut the subsidies on phosphate and potash-based fertilisers in the fiscal year that began in April in an effort to rein in its fiscal deficit. The cut for the second year in a row will limit Indian fertiliser companies’ ability to pass on falls in global fertiliser prices to local farmers and thereby stem any rebound in consumption of potash and phosphate based fertilisers which fell by nearly 30 per cent last year.

It will also limit India’s imports of potash and phosphate. India imports all its potash and also buys about 90 per cent of its phosphate from abroad. The subsidy for diammonium phosphate (DAP) has been cut by 14 per cent from a year ago to 12,350 rupees ($228.72) per tonne for 2013/14, and for muriate of potash (MoP) by 21.5 per cent to 11,300 rupees ($209.28) per tonne, the government said in a statement. “According to the new rates, the total subsidy for the potash and phosphate fertilisers for the financial year 2013-14 would be reduced by around 15 per cent,” the statement said.